What is Community Property?

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Community Property is a type of joint ownership of assets between married couples. Generally, if you live in a community property state, spouses equally own all property acquired during marriage. In addition, half of each spouse’s income is owned by the other spouse during the marriage. And similarly debts incurred during marriage are generally debts that belong to the couple.

What assets are not considered Community Property?

The property that each partner brings into the marriage or receives by gift, bequest or devise during the marriage is considered separate property. This means that those assets belong to the partner who received the asset. It’s important not to comingle those funds with community property assets as this could change the asset from a separate property designation to community property.

Is California the only Community Property State?

No! There are several other states that are community property states. Other community property states include: Alaska [by agreement], Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

How does Community Property affect my federal income tax return?

Community property laws affect the calculation of your income on your federal income tax returns, if you are married and living in a community property state. If you are married, your tax will usually be less if you file married filing jointly than if you were to file married filing separately. However, sometimes it can be to your benefit to file separate returns. If you plan to do this, it’s best to determine community income and separate income and how those calculations could result in more or less tax payments.

SquareFairy

Click Here to learn more about Community Property in California.

SquareFairy provides a new tool called SplitFairy. SplitFairy identifies personal and community property and helps you try various scenarios to split your property. There is no fees to use SplitFairy but you will need to register.

Candice Saadian Costa

Candice Saadian Costa, who runs Golden Gate Mediation in San Francisco, is a California licensed attorney who has dedicated her legal career to working with families in high-conflict. Serving as both a litigator and mediator, Candice represents both parents and minors in high conflict juvenile dependency matters and mediation services to couples facing divorce. In her family law mediation practice, Candice strives to enforce the idea that the divorce process can be navigated through with dignity and does not have to become a drawn-out, expensive and adversarial process. Candice respects each of her clients’ unique situations and tailors her services accordingly. She is committed to always maintaining impartiality and fairness to each party.

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